[Introduced February 3, 2011; referred to the Committee on Health
and Human Resources; and then to the Committee on Finance.]

____________

A BILL to amend the Code of West Virginia, 1931, as amended, by
adding thereto a new article, designated §33-16G-1, §33-16G-2,
§33-16G-3, §33-16G-4, §33-16G-5, §33-16G-6, §33-16G-7, §33-16G-8, §33-16G-9 and §33-16G-10, all relating to the health
benefit exchange; setting forth purpose; defining terms;
providing for the establishment of the governing board of
directors; setting forth functions of the exchange; outlining
the board’s duties and authority; authorizing rulemaking,
including emergency rulemaking; establishing a special revenue
account; and authorizing assessment of fees.

Be it enacted by the Legislature of West Virginia:

That the Code of West Virginia, 1931, as amended, be amended
by adding thereto a new article, designated §33-16G-1, §33-16G-2,§33-16G-3, §33-16G-4, §33-16G-5, §33-16G-6, §33-16G-7, §33-16G-8,
§33-16G-9 and §33-16G-10, all to read as follows:

ARTICLE 16G. WEST VIRGINIA HEALTH BENEFIT EXCHANGE ACT.

§33-16G-1. Title.

This article shall be known and may be cited as the West
Virginia Health Benefit Exchange Act.

§33-16G-2. Purpose and intent.

The purpose of this article is to establish a West Virginia
Health Benefit Exchange to facilitate the purchase and sale of
qualified health plans in the individual market in this state and
a Small Business Health Options Program within the exchange to
assist qualified small employers in this state in facilitating the
enrollment of their employees in qualified health plans.

§33-16G-3. Definitions.

For purposes of this article:

(a) “Commissioner” means the West Virginia Insurance
Commissioner.

(b)“Exchange” means the West Virginia Health Benefit
Exchange established pursuant to section four of this article.

(c) “Federal Act” means the Federal Patient Protection and
Affordable Care Act (Public Law 111-148), as amended by the federal
Health Care and Education Reconciliation Act of 2010 (Public Law
111-152), and any amendments thereto, or regulations or guidance
issued thereunder.

(d) “Health benefit plan” includes the same policies described
in section one-b, article sixteen of this chapter as the policies
to which said article is applicable.

(e) “Health carrier” or “carrier” means an entity subject to
the insurance laws of this state, or subject to the jurisdiction of
the commissioner, that contracts or offers to contract to provide,
deliver, arrange for, pay for, or reimburse any of the costs of
health care services, including a sickness and accident insurance
company, a health maintenance organization, a nonprofit hospital
and health service corporation, or any other entity providing a
plan of health insurance, health benefits or health services.

(f) “Public Health Service Act” or “PHSA” means the provisions
of 42 U.S.C. §300g et seq., and any amendments thereto, or
regulations or guidance issued thereunder.

(g) “Qualified dental plan” means a limited scope dental plan
that has been certified in accordance with this article.

(h) “Qualified employer” means a small employer that elects to
make its full-time employees eligible for one or more qualified
health plans offered through the SHOP Exchange, and at the option
of the employer, some or all of its part-time employees, provided
that the employer:

(1) Has its principal place of business in this state and
elects to provide coverage through the SHOP Exchange to all of its
eligible employees, wherever employed; or

(2) Elects to provide coverage through the SHOP Exchange to
all of its eligible employees who are principally employed in this
state.

(i) “Qualified health plan” means a health benefit plan that
has in effect a certification that the plan meets the criteria for
certification described in this article.

(j) “Qualified individual” means a resident of this state or
a state that is a party to a regional exchange with West Virginia
who is seeking to enroll in a qualified health plan offered to
individuals through the exchange, who is not incarcerated due to a
conviction, and who is and is reasonably expected to be for the
entire period for which enrollment is sought, a citizen or national
of the United States or an alien lawfully present in the United
States.

(k) “Secretary” means the Secretary of the United States
Department of Health and Human Services.

(l) “SHOP Exchange” means the Small Business Health Options
Program established under this article.

(m) “Small employer” means an employer that employed an
average of not more than fifty employees during the preceding
calendar year: Provided, That an employer that makes enrollment in
qualified health plans available to its employees through the SHOP
Exchange and that would cease to be a small employer by reason of
an increase in the number of its employees, shall continue to be
treated as a small employer for purposes of this article as long as
it continuously makes enrollment through the SHOP Exchange
available to its employees.

§33-16G-4. Establishment of exchange.

(a) There is hereby established within the offices of the
Insurance Commissioner a body corporate and politic to be known as
the West Virginia Health Benefit Exchange which is a governmental
instrumentality of the state, and the exercise by the board of the
powers conferred by this article and the carrying out of its
purposes and duties are essential governmental functions and for a
public purpose.

(b) The exchange shall:

(1) Facilitate the purchase and sale of qualified health
plans;

(2) Provide for the establishment of a SHOP Exchange to assist
qualified small employers in this state in facilitating the
enrollment of their employees in qualified health plans; and

(3) Meet the requirements of this article and any rules
adopted hereunder.

(c) The exchange may accept gifts, grants and bequests,
contract with other persons, and enter into memoranda of
understanding with other governmental agencies to carry out any of
its functions, including agreements with other states to perform
joint administrative functions: Provided, That the provisions of
article three, chapter five-a of this code relating to the
Purchasing Division of the Department of Administration do not
apply to these contracts: Provided, however, That the exchange may
not enter into contracts with any health insurance carrier or an
affiliate of a health insurance carrier.

(d) The exchange may enter into information-sharing agreements
with federal and state agencies and other state exchanges to carry
out its responsibilities under this article, provided such
agreements include adequate protections with respect to the
confidentiality of the information to be shared and comply with all
state and federal laws and regulations.

(e)(1) The exchange shall operate subject to the supervision
and control of the board, which is composed of the following ten
persons:

(A) Four ex officio members who are entitled to vote: The
commissioner, who is the board’s chairperson; the director of the
West Virginia State Medicaid Office; the Director of the West
Virginia Children’s Health Insurance Program; and the chair of the
West Virginia Health Care Authority: Provided, That each ex
officio member may designate a representative to serve in his or
her place;

(B) Four persons appointed by the Governor, each to represent
the interests of one of the following groups: Individual health
care consumers; small employers; organized labor; and insurance
producers or navigators;

(C) One person to represent the interests of payers who is
selected by majority vote of an advisory group comprising
representatives of the ten carriers with the highest health
insurance premium volume in this state in the preceding calendar
year, as certified by the commissioner: Provided, That beginning
in 2014, the advisory group shall be comprised only of
representatives of those carriers that are offering qualified plans
in the exchange regardless of premium volume: Provided, however,
That the member selected pursuant to this paragraph may not be an
employee of a carrier or an affiliate of a carrier eligible to
select such member; and

(D) One person to represent the interests of health care
providers selected by the majority vote of an advisory group
comprised of a representative of each of the following: West
Virginia Hospital Association, West Virginia State Medical
Association, West Virginia Primary Care Association, West Virginia
Nurses Association, West Virginia Society of Osteopathic Medicine,
West Virginia Academy of Family Physicians, West Virginia
Pharmacists Association and West Virginia Dental Association.

(E) Selection of board members pursuant to paragraphs (C) and
(D) of this subdivision shall be conducted in a manner and at such
times designated by the commissioner.

(2)(A) Each member appointed pursuant to paragraph (B) of
subdivision (1) of this section or selected pursuant to paragraph
(C) or (D) of subdivision (1) of this section shall serve a term of
two years and is eligible to be reappointed: Provided, That any
appointed or selected member whose term has expired may continue to
serve until either he or she has been reappointed or his or her
successor has been duly appointed or selected.

(B) Board members may be removed by the Governor for cause.

(C) Members of the board are not entitled to compensation for
services performed as members but are entitled to reimbursement for
all reasonable and necessary expenses actually incurred in the
performance of their duties.

(3) Seven members of the board constitute a quorum, and the
affirmative vote of six members is necessary for any action taken
by vote of the board: Provided, That no vacancy in the membership
of the board impairs the rights of a quorum by such vote to
exercise all the rights and perform all the duties of the board.

(4) The board may employ an executive director who has overall
management responsibility for the exchange and such employees as
may be necessary: Provided, That the executive director and
employees of the exchange are exempt from the classified service
and not subject to the procedures and protections provided by
article two, chapter six-c of this code and article six, chapter
twenty-nine of this code;

(f) The board shall make an annual report to the Governor and
also file it with the Legislature. The report shall summarize the
activities of the exchange in the preceding calendar year.

(g) Neither the board nor its employees are liable for any
obligations of the exchange. No member of the board or employee of
the exchange is liable and no cause of action of any nature may
arise against them for any act or omission related to the
performance of their powers and duties under this article unless
the act or omission constitutes willful or wanton misconduct. The
board may provide in its bylaws or rules for indemnification of,
and legal representation for, its members and employees.

§33-16G-5. Duties of exchange.

(a) The exchange shall begin to make qualified health plans
available to qualified individuals and qualified employers
beginning no later than January 1, 2014, and it may not make
available any health benefit plan that is not a qualified health
plan.

(b) The exchange shall, consistent with any applicable
guidelines issued by the secretary:

(2) Provide for the operation of a toll-free telephone hotline
to respond to requests for assistance;

(3) Provide for enrollment periods;

(4) Maintain an Internet website through which enrollees and
prospective enrollees of qualified health plans may obtain
standardized comparative information on such plans;

(5) Assign a rating to each qualified health plan offered
through the exchange in accordance with the criteria developed by
the secretary and determine each qualified health plan’s level of
coverage;

(6) Use a standardized format for presenting health benefit
options in the exchange;

(7) Inform individuals of eligibility requirements for the
Medicaid program, the Children’s Health Insurance Program or any
applicable state or local public program, and provide for the
enrollment of any individual determined to be eligible for any such
program;

(8) Establish and make available by electronic means a
calculator to determine the actual cost of coverage after
application of any applicable premium tax credit or cost-sharing
reduction;

(9) Establish a SHOP Exchange through which qualified
employers may access coverage for their employees;

(10) Grant a certification attesting that an individual is
exempt from the individual responsibility requirement or from the
penalty imposed by federal law;

(11) Transfer to the United States Secretary of the Treasury
the name and taxpayer identification number of each individual who:

(A) Was issued a certification under subdivision (10) of this
subsection;

(B) Was an employee who was determined to be eligible for the
premium tax credit under section 36B of the Internal Revenue Code
but who was determined to be eligible for the premium tax credit
under section 36B of the Internal Revenue Code of 1986 because
either the employer did not provide minimum essential coverage or
the employer provided the minimum essential coverage, but it was
determined under section 36B(c)(2)(C) of the Internal Revenue Code
to either be unaffordable to the employee or not provide the
required minimum actuarial value;

(C) Notifies the Exchange that he or she has changed
employers; and

(D) Ceases coverage under a qualified health plan during a
plan year and the effective date of that cessation;

(12) Provide to each employer the name of each employee of the
employer described in paragraph B, subdivision (11) of this
subsection who ceases coverage under a qualified health plan during
a plan year and the effective date of the cessation;

(13) Perform duties required of the exchange by the Secretary
or the Secretary of the Treasury related to determining eligibility
for premium tax credits, reduced cost-sharing or individual
responsibility requirement exemptions;

(14) Select entities qualified to serve as navigators in
accordance with the Federal Act and standards developed by the
secretary, and award grants to enable navigators to:

(A) Educate the public about the availability of qualified
health plans and of premium tax credits and cost-sharing
reductions;

(D) Provide referrals to the consumer services division of the
West Virginia offices of the Insurance Commissioner or any other
appropriate state agency for any enrollee with a grievance,
complaint or question regarding their health benefit plan, coverage
or a determination under that plan or coverage; and

(E) Provide information in a manner that is culturally and
linguistically appropriate to the needs of the population being
served by the exchange;

(15) Review the rate of premium growth within the exchange and
outside the exchange, and consider the information in developing
recommendations on whether to continue limiting qualified employer
status to small employers; and

(16) Credit the amount of any free choice voucher to the
monthly premium of the plan in which a qualified employee is
enrolled, in accordance with the federal act, and collect the
amount credited from the offering employer; and

(17) Consult with stakeholders relevant to carrying out the
activities required under this article; and

(18) Meet the following financial integrity requirements:

(A) Keep an accurate accounting of all activities, receipts
and expenditures and annually submit to the secretary, the
Governor, the commissioner and the Legislature a report concerning
such accountings:

(B) Fully cooperate with any investigation conducted by the
secretary pursuant to the secretary’s authority under the Federal
Act and allow the secretary, in coordination with the Inspector
General of the United States Department of Health and Humans
Services, to:

(i) Investigate the affairs of the exchange;

(ii) Examine the properties and records of the exchange; and

(iii) Require periodic reports in relation to the activities
undertaken by the exchange; and

(C) In carrying out its activities under this article, not use
any funds intended for the administrative and operational expenses
of the exchange for staff retreats, promotional giveaways,
excessive executive compensation or promotion of federal or state
legislative and regulatory modifications.

(c) Prior to 2016, the requirements of this section are
contingent with the availability of sufficient funding, and in the
event of a decrease in anticipated funding from the federal
government or other sources, the board may reassess the feasibility
of meeting each of the requirements listed in this section and make
appropriate adjustments to the functions of the exchange as are
deemed necessary.

§33-16G-6. Health benefit plan certification.

(a) The exchange may certify a health benefit plan as a
qualified health plan if:

(1) The plan provides the essential health benefits package of
the federal act;

(2) The premium rates and contract language have been approved
by the commissioner;

(3) The plan provides at least a bronze level of coverage,
unless the plan is certified as a qualified catastrophic plan,
meets the requirements of the federal act and implementing rules
for catastrophic plans, and will only be offered to individuals
eligible for catastrophic coverage;

(4) The plan’s cost-sharing requirements do not exceed the
limits established under the federal act, and if the plan is
offered through the SHOP Exchange, the plan’s deductible does not
exceed the limits established under the federal act;

(5) The health carrier offering the plan:

(A) Is licensed and in good standing to offer health insurance
coverage in this state;

(B) Offers at least one qualified health plan in the silver
level and at least one plan in the gold level through each
component of the exchange in which the carrier participates, where
“component” refers to the SHOP Exchange and the exchange for
individual coverage;

(C) Charges the same premium rate for each qualified health
plan without regard to whether the plan is offered through the
exchange and without regard to whether the plan is offered directly
from the carrier or through an insurance producer;

(D) Does not charge any cancellation fees or penalties in
violation of subsection (c), section five of this article; and

(E) Complies with the regulations developed by the secretary
under section 1311(d) of the Federal Act, implementing rules and
such other requirements as the exchange may establish;

(6) The plan meets the requirements of certification as set
forth in rule; and

(7) The exchange determines that making the plan available
through the exchange is in the interest of qualified individuals
and qualified employers in this state.

(b) The exchange may not exclude a health benefit plan:

(1) On the basis that the plan is a fee-for-service plan;

(2) Through the imposition of premium price controls by the
exchange; or

(3) On the basis that the health benefit plan provides
treatments necessary to prevent patients’ deaths in circumstances
the exchange determines are inappropriate or too costly.

(c) The exchange shall require each health carrier seeking
certification of a plan as a qualified health plan to:

(1) Submit a justification for any premium increase before
implementation of that increase. The carrier shall prominently
post the information on its Internet website. The exchange shall
take this information, along with the information and the
recommendations provided to the exchange by the commissioner, into
consideration when determining whether to allow the carrier to make
plans available through the Exchange;

(2) Make available to the public and submit to the exchange,
the secretary, and the commissioner, accurate and timely disclosure
of the following:

(i) Claims payment policies and practices;

(ii) Periodic financial disclosures;

(iii) Data on enrollment;

(iv) Data on disenrollment;

(v) Data on the number of claims that are denied;

(vi) Data on rating practices;

(vii) Information on cost-sharing and payments with respect to
any out-of-network coverage;

(viii) Information on enrollee and participant rights under
title I of the Federal Act; and

(ix) Other information as determined appropriate by the
secretary; and

(3) Permit individuals to learn, in a timely manner upon the
request, the amount of cost-sharing, including deductibles,
copayments, and coinsurance, under the individual’s plan or
coverage that the individual would be responsible for with respect
to the furnishing of a specific item or service by a participating
provider. At a minimum, this information shall be made available
to the individual through an Internet website and through other
means for individuals without access to the Internet.

(d) The exchange may not exempt any health carrier seeking
certification of a qualified health plan, regardless of the type or
size of the carrier, from state licensure or solvency requirements
and shall apply the criteria of this section in a manner that
assures a level playing field between health carriers participating
in the exchange.

(e) The provisions of this article that are applicable to
qualified health plans also apply to the extent relevant to
qualified dental plans as set forth in rule.

§33-16G-7. Funding; publication of costs.

(a) On and after July 1, 2011, the board is authorized to
assess fees on health carriers licensed in this state, including
health carriers that do not participate in the exchange, and shall
establish the amount of such fees and the manner of the remittance
and collection of such fees in rule: Provided, That such fees
shall be based on premium volume of health insurance in this state.

(b) The exchange shall publish the average costs of licensing,
regulatory fees and any other payments required by the exchange,
and the administrative costs of the exchange, on an Internet
website to educate consumers on such costs. This information shall
include information on moneys lost to waste, fraud and abuse.

§33-16G-8. Rules.

The exchange may promulgate emergency rules and propose
legislative rules for adoption by the Legislature pursuant to the
provisions of article three, chapter twenty-nine-a of this code to
implement the provisions of this article: Provided, That rules
promulgated under this section may not conflict with or prevent the
application of the federal act or regulations promulgated by the
secretary under such act.

§33-16G-9. Relation to other laws.

Nothing in this article, and no action taken by the exchange
pursuant to this article, preempts or supersedes the authority of
the commissioner to regulate the business of insurance within this
state and, except as expressly provided to the contrary in this
article, all health carriers offering qualified health plans in
this state shall comply fully with all applicable health insurance
laws of this state and regulations adopted and orders issued by the
commissioner.

§33-16G-10. Special revenue account created.

(a) There is hereby created a special revenue account in the
State Treasury, designated the “West Virginia Health Benefits
Exchange Fund,” which shall be an interest-bearing account and may
be invested in the manner permitted by article six, chapter twelve
of this code, with the interest income a proper credit to the fund,
unless otherwise designated in law. The fund shall be administered
by the board and used to pay all proper costs incurred in
implementing the provisions of this article. Moneys deposited into
this account are available for expenditure as the board may direct
in accordance with the provisions of this article. Expenditures
shall be for the purposes set forth in this article, are authorized
from collections and do not revert to the General Fund.

(b) The following shall be paid into this account:

(1) All funds from the federal government received and
dedicated to or otherwise able to be used for the purposes of this
article;

(2) All other payments, gifts, grants, bequests or income from
any source;

(3) Fees on health carriers established by the board; and

(4) Appropriations from the Legislature.

NOTE: The purpose of this bill is to provide for a health
insurance exchange in accordance with the Patient Protection and
Affordable Care Act.

This article is new; therefore, underscoring and strike-throughs have been omitted.